(Corrects grammatical error in headline)
* Industrial commodities drop on oversupply, demand concerns
* Rebar, iron ore fall by 6 pct limit; coking coal, coke sink
* Traders' steel inventory rises for third week
* Iron ore stocks at China's ports highest since March 2015
* Japanese, Chinese rubber futures plunge about 5 pct
By Manolo Serapio Jr
MANILA, May 23 (Reuters) - Asian industrial commodities, including steel, iron ore and rubber, slumped on Monday as concerns about the economic health of the region's two biggest export economies, China and Japan, raised questions about their demand for raw materials.
Chinese steel and iron ore futures sank to their lowest since March, each tumbling 6 percent at one stage, as faltering domestic demand puts renewed pressure on the oversupplied global steel market.
Steelmaking raw materials coking coal and coke slid by as much as 7 percent and other China-traded commodities also declined amid growing doubts on whether the world's second-largest economy is stabilising. Chinese exports for April slumped a more-than-expected 1.8 percent from a year ago, the government said on May 8.
Chinese and Japanese rubber futures dropped 5.3 percent and 4.5 percent, respectively, following reports on Monday that Japan's exports in April fell 10 percent from a year ago and new manufacturing orders plunged to the lowest in 41 months. demand for steel in China has passed and the current hot weather has slowed construction activity, said Kevin Bai, analyst at CRU consultancy in Beijing.
"Along with the increased steel production that we saw in response to the price increase this year, prices will be under pressure," said Bai.
Rebar, or reinforcing bar used in construction, fell by the 6 percent maximum allowed by the Shanghai Futures Exchange (ShFE) SRBcv1 to a session low of 1,930 yuan ($295), its weakest since March 7. It closed down 5.2 percent at 1,947 yuan.
On the Dalian Commodity Exchange, iron ore DCIOcv1 also dropped by its 6 percent downside limit to 350 yuan a tonne, its lowest since March 4. It closed down 5 percent at 353.50 yuan.
CHINA STEEL STOCKS RISE
Chinese steel and iron ore futures have fallen 30 percent from their April peaks. The price surge was fuelled by bets that the economy would improve, leading to bloated prices and volumes on domestic commodity exchanges and prompting regulators to impose curbs to restore order.
Steel and rebar prices appeared to stabilise last week, rising for the week after three straight weeks of declines, but today's drop indicates that more froth may be worked from the market.
China's equity benchmarks ended the day higher but the Shanghai Composite Index has dropped for five weeks in a row, underscoring concerns about the economy.
Stocks of steel products, including rebar, held by Chinese traders rose for a third week to 9.55 million tonnes in the week to May 20, said Bai.
Imported iron ore stocks at China's major ports rose 1.6 percent from the previous week to 100.45 million tonnes on May 20, according to data tracked by industry consultancy SteelHome, the highest since March 2015. SH-TOT-IRONINV
Dalian coking coal DJMcv1 and coke DCJcv1 each slid by their 7 percent exchange-set limit, before closing down 4.2 percent and 5.4 percent, respectively. Shanghai hot-rolled coil SHHCcv1 dropped 5.3 percent.
Shanghai rubber SNRcv1 fell 5.3 percent, Zhengzhou cotton CCFcv1 slipped 3 percent, Dalian egg DJDcv1 dropped 1.2 percent and Dalian soyoil DBYcv1 lost 2.4 percent.
Rubber on the Tokyo Commodity Exchange (TOCOM) plunged more than 5 percent to 154.30 yen ($1.41) JRUc6 , the weakest since Feb. 29, before closing 4.5 percent lower at 155.80 yen.
TOCOM futures, which set the tone for tyre-grade rubber prices in Southeast Asia, have lost more than 20 percent since April on oversupply fears and weak demand in top buyer China.
($1 = 6.5470 Chinese yuan) ($1 = 109.4700 yen)